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J.C. Penney publicly battles former employee

Last summer, J.C. Penney employee Bob Blatchford appeared on the “Today” show and talked about the retail chain’s biggest open secret: It marks up merchandise prices before putting them on sale or otherwise discounting them.

“I saw a lot of pricing teams going through the store, raising the prices, mostly doubling—towels and clothing,” he said. “Then they would go on sale, and they wouldn't always go on sale for 50 percent off.”

According to The Huffington Post, Blatchford was fired two days after his TV interview aired from the St. Petersburg, Fla., store where he worked. After that, the former employee said, the company contested Blatchford’s application for unemployment benefits and filed an arbitration petition seeking the return of any company documents Blatchford might have.

J.C. Penney didn’t offer a comment to HuffPo about Blatchford’s claims or its pricing practices, but the site got a hold of the petition against Blatchford, which was filed with the American Arbitration Association. It claims Blatchford has an “unbalanced vendetta” against the company and revealed “trade secret, proprietary and confidential business information.”

Marking up an item’s “original” price before putting it on sale is a common practice among retailers in general, but it’s a particularly touchy one for J.C. Penney.

In 2012, the company launched a campaign in which it promised it would abandon discounts and sales in favor of standardized, permanent low prices. That turned out to not be so permanent.

Almost exactly a year after the pricing changes went into effect, the pricing structure reverted back. A few months later, CEO Ron Johnson, the architect of the plan, was fired.

Now, as the company closes stores, it’s in a predicament. Not only has Blatchford pulled the curtain back on the retailer’s sales practices, the company itself sought to get away from them and take a more honest approach. (The company branded its no-sales policy as “fair and square” pricing.) That has invited a lot of scrutiny, which has led critics to call the chain’s current prices “faker than ever.”

HuffPo states all that scrutiny has led to a “widespread loss of customer trust” in J.C. Penney. Certainly, it needs to restore that trust, but keeping a former employee who went on TV to talk about it from collecting unemployment likely isn’t the way to do that.

One commenter on the HuffPo story wrote, “J.C. Penney, [which] pays millions of dollars to advertisers for media attention, is attacking a guy who did not pay a cent for his media attention? Who comes up with this stuff?”